Can the Bens Soft Pretzels Advertising Fund be used for toll-free locator services?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
We will administer an advertising and marketing fund (the "Advertising Fund") for the advertising and marketing programs as we may deem necessary or appropriate. You must contribute to the Advertising Fund up to 4% (currently 1.5%) of the Gross Sales of your Store, as determined by us, payable together with the Royalty Fee due under the Franchise Agreement. The Advertising Fund Fee is separate from any local marketing requirements. We have the right to increase the Advertising Fund Fee up to 4% upon 90 days' advance written notice, although if we increase the Advertising Fund Fee to 3% or 4% we will reduce the local advertising requirements accordingly such that your total required marketing expenditure does not exceed 4% of Gross Sales.
We will direct all advertising and marketing programs financed by the Advertising Fund, with sole discretion over the creative concepts, materials and endorsements used, and the geographic, market and media placement and allocation. Currently the sources of our marketing and advertising programs are our in-house personnel and an external marketing firm. The Advertising Fund may be used to pay the costs of preparing advertising materials and administering national, regional and local advertising programs and public relations activities including creating direct mail and media materials which may include print, television, radio and billboards, formulating advertising and marketing programs, developing and maintaining website and internet based advertising and marketing programs, intranet development and ongoing operation, toll-free locator services, employing advertising agencies, providing brochures and other advertising and marketing materials, and participating in national or regional trade shows.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 23–30)
What This Means (2025 FDD)
According to Bens Soft Pretzels' 2025 Franchise Disclosure Document, the Advertising Fund can be used to cover the costs of various advertising and marketing programs, including toll-free locator services. The franchisor has sole discretion over these programs. This fund is supported by franchisee contributions of up to 4% of gross sales, with the current contribution rate being 1.5%.
This means that a portion of the money franchisees pay into the Advertising Fund could be used to operate a toll-free number that customers can call to find the nearest Bens Soft Pretzels location. This can be a valuable tool for driving business to individual franchise locations, as it makes it easier for potential customers to find them. The franchisor decides how the advertising and marketing programs are run.
Bens Soft Pretzels has the discretion to choose whether or not to implement and maintain a toll-free locator service. The FDD specifies that the franchisor directs all advertising and marketing programs financed by the Advertising Fund, and has sole discretion over the creative concepts, materials, endorsements, geographic, market, media placement, and allocation. This indicates that while the fund can be used for toll-free locator services, it is not guaranteed that it will be.
For the year ending December 31, 2024, the Advertising Fund was spent on production (1.58%), media placement (23.66%), administrative expenses (29.72%), and other uses (6.54%). The other uses include dues, subscriptions, meals, entertainment, meetings, training, supplies, travel, and lodging. The FDD states that Bens Soft Pretzels does not currently use any part of the Advertising Fund to solicit new franchise sales.